Goodman signs more Amazon projects

Goodman Group
will develop two more logistics centres for Amazon in Germany, taking its total involvement with the e-commerce giant to seven facilities across Europe.

Chief executive Greg Goodman said the new agreements underlined the opportunities for his group both in cash-constrained Europe and from e-commerce. “We will use the next five years in a difficult climate to build our brand," he said.

In Europe, the group has found tenants for more than 1 million sq m of new logistics space in 2011.

“We are getting more market share and we have the capital to do it," Mr Goodman said.

The Goodman Europe Logistics Fund (GELF) last month raised €400 million ($524 million) in new equity and refinanced €800 million in five-year facilities.

Mr Goodman said the big pension funds were taking advantage of the economy to get set in major European logistics investments. Through GELF, they can invest in new Amazon facilities on 10-year leases at returns over 7 per cent with growth – ahead of the best cash returns of about 3 per cent.

At the same time, e-commerce has opened up new opportunities.

“Thirty per cent of our development book is because of the influence of e-commerce on supply chains," Mr Goodman said.

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The latest Amazon projects, in the German centres of Koblenz and Pforzheim, are both about 110,000 sq m in size and complement Amazon developments undertaken by Goodman in Germany, France (2) and the UK (1). The deals confirmed Goodman as a market leader in German logistics real estate, said country head Andreas Fleischer.

Goodman has also boosted its development book in Australia, as competitors fall away and customers like Linfox and DHL continue to expand.

“There will be a revamp of e-commerce, and the supply chain, around Australia," Mr Goodman said.

Goodman last week confirmed guidance of full-year after-tax operating profit of $460 million and estimated its six-month distribution at 1.8¢ per security.